A Business Reports the Following in Its Financial Statements Its 'Times Interest Earned' Ratio Is:
A) 5

Multiple Choice

A business reports the following in its financial statements:
$$\begin{array} { l } \text { Profit before tax and interest } &\$100\\\text { Interest expense }&\quad\quad\quad\quad20\\\text { Income tax expense }&\quad\quad\quad\quad\quad\quad\quad\quad30\end{array}$$
Its 'times interest earned' ratio is:

A) 5.0 times
B) 6.5 times
C) 3.5 times
D) 4.0 times